M8 Profitability Ratios Flashcards
1
Q
Calculate Gross profit margin
A
Gross profit / Net sales
2
Q
Calculate Profit Margin*
A
Net Income / Net Sales
3
Q
Return on Sales*
A
EBIT / Net Sales
4
Q
ROA
A
Net Income / Average total assets
5
Q
ROE
A
Net Income / Average total equity
6
Q
Operating Cash flows
A
Cashflows from operations / Current Liabilities
7
Q
What do profitability ratios measure?
A
Measures the success of an enterprise
8
Q
Cogs formula
A
COGS = Beginning inventory + purchases - ending inventory
9
Q
DuPont ROA
A
Profit Margin * Asset Turnover
